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Whatever expenditure is incurred for purchasing factor services is known as ...................?
Social costs
Opportunity costs
Money costs
Real costs.
- Social Costs: These are the total costs to society, including both private and external costs. They consider the broader impact of an economic activity on the community and environment.
- Opportunity Costs: The cost of choosing one alternative over another, essentially the benefit you miss out on by not selecting the next best option.
- Money Costs: The actual monetary expenditure incurred in acquiring factor services, such as wages paid for labor, rent for land, and interest for capital.
- Real Costs: These refer to the physical effort, time, and resources used in producing goods or services, not just the financial outlay.
- Correct Answer: Money costs
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